By SETH JOSEPH
That is half 3 of Seth’s sequence about Epic that has generated a lot curiosity and a bit controversy and we’re glad to host it on THCB. Half 1 and Half 2 had been revealed on Forbes earlier this yr.
In line with folks within the room, Judy Faulkner’s imaginative and prescient on stage at Epic’s 2022 Consumer Group Assembly was epic, within the grandest sense of the phrase.
The corporate, which had grown as a unified scientific and billing EHR system, was now laying out a roadmap during which it might be the digital entrance door for all issues client dealing with. A large panoply of capabilities together with, in keeping with Epic’s personal subsequent documentation, buyer relationship administration, supplier finders and on-line scheduling, on-line check-in, affected person monetary expertise, and lots of others.
Core to enabling all of this was shifting how sufferers work together with MyChart, the patient-facing utility that permits people to entry their well being information.
Traditionally, every MyChart account was ‘tethered’ between a person and a hospital system and represented a easy portal for the person to view her information. If a person had been seen at a number of completely different hospital techniques, then she would have a number of separate MyChart “cases”, or totally separate accounts and logins.
Now, Epic would ‘sew collectively’ the well being information and information from completely different hospitals on behalf of the person in advancing what colloquially has been known as Epic’s ‘nationwide MyChart technique’, and allow sturdy new performance, creating compelling community results between customers and hospitals.
There have been just a few issues with Epic’s technique: first, many purchasers weren’t asking Epic to develop these capabilities; second, there have been startups and incumbents already offering many of those capabilities; and third, the corporate was in a race with a federal company, which was pushing for open requirements and entry that threatened Epic’s plans.
However for a corporation that had slowly and steadily turn into the dominant well being expertise participant, whose employees conferences for a interval ended half-jokingly on a slide with the phrases “World Domination” on them, these issues had been all fixable.
The Promise Of Client Empowerment Instruments
As trendy historical past has demonstrated again and again, the flexibility to personal or management the buyer entry level for expertise could be a strategic benefit. Apple’s glossy product designs, consumer expertise and tight ecosystem allow it to extract 30% of app developer revenues looking for to succeed in Apple’s customers. Google’s dominance in search has positioned it to be the entryway to the web for billions of customers no matter their final vacation spot, leading to extraordinary income development and profitability.
In healthcare, the flexibility to meaningfully have interaction customers by expertise has lengthy held promise of fixing intractable issues, whereas additionally probably positioning the agency that figures out how to take action as a brand new locus of energy, equally as Apple and Google above. Triaging care choices for customers, navigating them to decrease price providers, facilitating funds, and offering trendy comfort choices are only a few of the lots of of use instances that consumer-facing expertise holds.
Key questions dealing with the corporations looking for to search out healthcare’s holy grail are how greatest to do that and the place to start out, as client habits and sentiment towards healthcare has confirmed difficult for tech firms to determine.
As an example, tech giants Microsoft and Google had each positioned important bets on ushering a brand new period of client empowerment within the late-2000s, with Microsoft HealthVault and Google Well being. Generally known as affected person well being information (PHR), the 2 firms sought to allow customers to entry, mixture, retailer and probably share their well being information.
On reflection, Microsoft and Google’s efforts had been maybe a bit too early, as each initiatives had been shut down within the early 2010s, earlier than an ecosystem of well being expertise adoption, connectivity and capabilities that might have feasibly supported their imaginative and prescient. And earlier than customers had a compelling purpose to vary their very own use of expertise to have interaction of their healthcare.
By 2022, nonetheless, the ecosystem had arrived. After the EHR Incentive program, greater than 90% of docs and hospitals had EHRs. The Covid-19 pandemic drove fast adoption of telehealth by each physicians and customers. Roughly $100 billion in enterprise capital had flowed into well being expertise innovation. New value transparency insurance policies had been shedding daylight into previously opaque and labyrinthine contracting practices. The twenty first Century Cures Act put enamel into driving interoperability, introducing data blocking as a civil penalty with million greenback fines. One business group revealed a report titled “Unbundling Epic: How The EHR Market Is Being Disrupted.” This writer proclaimed The EHR Is Useless.
If the EHR was useless or being disrupted, then each EHR firm wanted a survival plan.
Epic’s Worry And Unfair Benefit
In line with one hospital government, it was this backdrop that involved Epic’s management: with a fast inflow of recent gamers and a shifting stability of energy, Epic is likely to be relegated to “simply being the pipes” whereas others capitalized on new alternatives. Given the corporate’s inflexible perception – confirmed appropriate time and time once more – that it alone would ship one of the best outcomes for its prospects and customers, Epic thought such an end result could be a catastrophe.
To fight this danger, Epic by mid-2022 had a brand new technique with MyChart and community results on the coronary heart of it.
Prior up to now, Epic had allowed its hospital prospects to construct their very own consumer-facing purposes on high of the MyChart chassis, or to herald third-party options to sit down on high of and combine with MyChart. To help this, Epic supplied software program growth kits (SDKs) to prospects, and allowed integration choices to 3rd occasion distributors.
Supporting this innovation was necessary to some Epic prospects. Specifically, bigger well being techniques (sometimes these with extra assets and class) seen their consumer-facing capabilities as an necessary method to differentiate themselves available in the market.
The brand new technique entailed driving adoption and utilization of MyChart (already one of the best recognized patient-facing utility within the nation), creating new consumer-facing capabilities and pushing hospitals to make use of these, and capturing customers as their most well-liked utility of alternative.
In brief, Epic sought to develop its sphere of affect, from a place of market dominance over one sector of healthcare (hospital techniques) into one other: customers.
To take action, Epic crafted a coherent coverage and set of techniques designed to influence hospitals to get on board with its imaginative and prescient, muscle out rivals, and affect regulation with the intention to obtain its ends.
Epic’s Ways Leverage Its Strengths, However Elevate Vital Anti Aggressive Questions
As beforehand reported, Epic arguably has a monopoly place with its inpatient EHR amongst multi-hospital well being techniques and tutorial medical facilities. Since that reporting, Epic has continued to realize market share; its software program is now used at hospitals accounting for 51% of all beds nationwide. As a number of hospital executives have put it in conversations, Epic is operating away with the EHR market.
The EHR could also be generally regarded as a scientific utility, however it might be extra correct to think about it because the hospital’s working system. The excellence might be necessary: an utility offers workflow capabilities to realize a selected goal, whereas an working system acts as an interface between the consumer and {hardware} that controls the principles by which purposes perform and the assets it has entry to.
Think about that whereas docs and clinicians use the EHR as an utility, it seems to be completely different from the hospital enterprise perspective: the EHR is the default system that its most extremely educated, paid and busiest employees work together with daily, rendering it the one most necessary system; the info entered by clinicians shops affected person information and related data that’s used for mission-critical functions together with billing, reporting, and audit capabilities; and accordingly, it’s the system which nearly each different utility should accordingly combine with (and never vice versa).
Because the hospital’s ‘working system’, Epic’s nationwide MyChart technique begins out with pure built-in benefits versus patient-facing expertise rivals, together with:
MyChart footprint: The federal Significant Use Program required hospitals to make use of EHRs that supplied a affected person portal. Right this moment, Epic’s MyChart boasts between 190M and 300M client accounts, an unbelievable early benefit given the rising utilization of non-public well being information.
Key client infrastructure and integration: A affected person portal is of restricted utility to a client. However one which begins out built-in with the supplier system, permitting single-sign on, scheduling, messaging, telehealth and associated methods the buyer might need to work together together with her supplier, can present substantial worth.
Hospital relationships and belief: The worth of having the ability to roll out new capabilities to current prospects representing 60% of all well being system spend at a single occasion (on this case, the 2022 Epic consumer group assembly) can’t be overstated. Nor can the years and, oftentimes, a long time of trusted relationships that Epic has cultivated with its prospects.
In line with hospital and business executives, Epic is within the strategy of pulling all of those levers. And whereas some rivals might complain about these built-in benefits, the fact is that Epic is dominant within the inpatient EHR marketplace for good purpose, and it’s a sensible technique to leverage its current strengths throughout product, capabilities and relationships to advance its nationwide MyChart imaginative and prescient.
Nonetheless, a few of Epic’s different techniques, although they might show to be extremely efficient, increase questions. Listed below are 4 particularly:
1. “You’re On Your Personal”: A yoyo can imply a silly or incompetent individual, a time period Epic has determined to use to a few of its prospects. On the firm’s 2022 consumer group assembly, Judy Faulkner launched the time period “you’re by yourself” (yoyo) to confer with Epic hospital prospects who needed to take care of their very own digital front-door technique. Shifting from its historic stance of being agnostic as as to if hospitals used solely Epic’s MyChart or most well-liked to develop their very own consumer-facing technique that built-in with MyChart, Epic made clear it needed hospitals to forgo their very own technique and get on board with a extra Epic-controlled model of MyChart. In line with this want are Epic supplies that clearly reveal characteristic divergence for patrons adopting its most well-liked ‘Customized’ model of MyChart versus characteristic discrimination for these ‘yoyo’ prospects.
2. Altering Price Construction For ‘Yoyos’ and Elevating Costs To Steer to MyChart: In line with executives from a number of techniques who discovered themselves being known as ‘yoyos’, Epic additionally subsequently and unilaterally has tried to vary its payment construction for expertise and help prices associated to MyChart. Traditionally, Epic charged a flat payment to help hospitals who both constructed their very own consumer-facing purposes that built-in with MyChart or partnered with business distributors for a similar goal. After it introduced its nationwide MyChart technique, nonetheless, Epic started notifying ‘yoyo’ prospects that it was shifting to a brand new pricing construction based mostly on the variety of customers the hospital served. A number of hospital executives talked about that this may enhance the related MyChart charges by a number of thousand p.c, from tens of 1000’s of {dollars} yearly to thousands and thousands; the choice was to keep away from these incremental charges by abandoning their very own consumer-facing methods and opting in to Epic’s nationwide MyChart technique.
In response to questions on these modifications, an Epic spokesperson famous that MyChart charges themselves had not modified since 1999. With respect to expertise and help prices, the spokesperson famous, “With ‘You’re On Your Personal,’ prospects can select to license extra instruments that permit their builders to embed elements of MyChart into their very own buyer purposes.”
3. Eliminating Preexisting Interoperability Entry: Epic had traditionally supported its ‘yoyo’ prospects, partially, by offering MyChart integration and interoperability assets to distributors that these prospects select to work with for consumer-facing purposes. With the introduction of its nationwide MyChart technique, nonetheless, Epic has begun limiting entry to these assets. In some instances, Epic has allegedly let slip to some distributors, together with these they’ve labored with for years collaboratively, that they’re now rivals, and that Epic could be “sunsetting” (eliminating) current interoperability assets and that the distributors wouldn’t have entry to future iterations of the identical assets.
Primarily based on a assessment of an Epic e mail response to a person requesting the standing of beforehand out there assets, what Epic seems to be doing in some instances is withdrawing utility programming interfaces (APIs) from its open.epic web site, and shifting these to its ‘Vendor Companies’ program. An preliminary problem for any vendor looking for to combine with Epic is that APIs in its Vendor Companies program usually are not revealed or discoverable. A vendor looking for to use to this program should first fill out and submit a questionnaire, however Epic offers no steerage on what the factors for inclusion or exclusion are, nor the way it determines what API assets will likely be out there or to whom. This apply exposes Epic to claims that it might be selecting winners and losers.
4. Delaying Requirements (Which Might Drive MyChart Adoption): The Nationwide Institute of Requirements and Expertise is a department of the U.S. Division of Commerce. Its IAL2 normal is meant to permit for distant identification proofing, which is important to enabling a future during which people can request and entry their very own medical information from current well being data networks that suppliers use routinely. Enabling people to make use of digital purposes of their option to entry their information is a precedence for ASTP/ONC, the federal company chargeable for selling interoperability. Epic introduced in August that they might help this functionality, however with a twist: the corporate helps the IAL2 normal to permit people to find the place they’ve obtained care, however to not request and retrieve their information.
Some business cynics have privately claimed that Epic’s stance will lead to people nonetheless needing to have an current or create a brand new MyChart account, which can enhance charges Epic expenses to hospitals (as MyChart charges are volume-based) and enhance lock-in of Epic’s ecosystem.
An Epic spokesperson flatly denies this, noting “Use of MyChart strictly for authorization to share information through OAuth 2.0 [another technical standard for identity authorization] doesn’t increment any MyChart subscription counter, doesn’t lead to any extra expenses to our prospects, and is unlikely to draw new customers to MyChart.”
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Individually, every tactic might help a reputable enterprise goal. As an example, whereas “yoyo” might sound a crude time period, it’s in step with Epic’s typically playful and artistic naming conventions. Altering its payment construction might replicate Epic making a course correction to a pricey manner of supporting prospects, as an Epic spokesperson instructed. And as business insider and analyst Brendan Keeler has famous, Epic is a frontrunner amongst EHRs on the subject of enabling particular person entry providers, so it’s laborious to critique.
Taken altogether, nonetheless, the collective techniques are sufficient to have some business insiders and traders involved that they’re anticompetitive.
Is Epic Unfairly Urgent its Excessive Floor Benefit?
Having grown organically since 1979 and solely up to now decade turning into the chief in EHR, it’s potential that Epic’s insular tradition blinds it to its personal market energy and affect in adjoining markets.
If that’s the case, it might behoove Epic to replicate on points involving fellow tech giants who leveraged dominant market positions in a single enterprise to unfairly and illegally benefit themselves when dealing with expertise shifts and altering client conduct. Most related could be the Microsoft lawsuit, during which Microsoft was discovered to be illegally using its dominant place as an working system to exclude rivals within the rising net browser market. And the more moderen case towards Google, during which Decide Mehta discovered the corporate acknowledged the ability of default placement and distribution to illegally safe and develop its place.
In Epic’s case, the corporate holds a dominant place because the hospital’s working system. By eradicating current APIs and interoperability assets to consumer-facing firms and altering payment buildings, it’s making it extra cumbersome and costly for hospitals to pick different patient-facing applied sciences, making MyChart the default path ahead. One end result is the notion that its techniques are exclusionary in nature and foreclose on innovation in an rising market. One other end result, additionally problematic for Epic, is decreased client alternative and elevated direct prices (to hospitals) and oblique prices (to rivals and customers).
But, Epic arguably doesn’t have to make use of these techniques to win. MyChart appears well-positioned to finish up as essentially the most sturdy, seamless and compelling ecosystem for customers on account of Epic’s trusted relationships with hospitals, dominant market share and current (and rising) community results.
In the interim and absent any pressure majeure stopping Epic from executing its plan, it seems to be like Epic’s client technique is prone to lead to community results that much more firmly entrench the corporate’s place and set up one other locus of energy. If profitable, Epic might discover itself able like Apple, with the flexibility to extract a considerable income share from any developer looking for to entry customers for whom Epic could be the default “digital entrance door”.
If you happen to work in Verona Wisconsin, this can be a good factor. Perhaps too, in case you’re a client.
Seth Joseph is the Founder and Managing Director of Summit Well being Advisors
